Herein I place below the Buyout Process as mentioned in Investopedia and what my book CREAM Analytics suggests to implement: this would be useful for Buyout Management.

1. Buyout Process vs CREAM Analytics1 2
Herein I place below the Buyout Process as mentioned in Investopedia and
what my book CREAM Analytics suggests to implement: this would be useful for
Buyouts Management.
1. Investopedia: A complete buyout typically takes three to six months. The
purchaser examines the target company’s balance sheet, income statement and
statement of cash flows, and conducts a financial analysis on any subsidiaries
or divisions seen as valuable.
1. CREAM Analytics:
Extract from the book [5/230]:
Q: We shall explore. Provide a solution. Then the bullock-cart speed of
management that we seem to be stuck in the mud, shall accelerate to a growth
pattern for companies to move
faster and forward. Society, at the
top of the stakeholders, has been
demanding more and more, from
corporate - and is not satisfied with
less and less, of transparency.
Volkswagen diesel cheat software -
shook the world - It costed 15
billion dollars for VW, having
allowed a cheat software through
the front gate, duly authorised and signed, by the Board and the CEO. HP -
Autonomy M&A, resulted in HP writing-off - 8.8 billion Dollars - in Q4 of
2012. FT, commenting upon the Corporate jet scandal that rocked
Industrivärden said, possibly it was a mere traffic offence compared to what
Volkswagen and Toshiba did. Toshiba’s president and CEO - Hisao Tanaka had
to step down after an investigative panel, found that company executives were
Read more: Buyout https://www.investopedia.com/terms/b/buyout.asp#ixzz5IbMGJnNL1
CREAM Analytics - my book titled CREAM Analytics by Return on Intangible with a subtitle Corporate Atomic2
Structure - CREAM Analytics [CREAM is an acronym for: C- Corporate Governance, R-Risk Management, E-
Earnings, A-Accounting Quality and M-Management Quality:] www.morebooks.de/store/gb/book/cream-
analytics-by-return-on-intangible/isbn/978-613-8-38589-9
IBCM © Research 2018 /1 6

2. complicit, in misreported earnings. Siemens code of conduct, was described as
the - read, laughed and filed code. The latest to add to the agony is Carillion ,3
that failed to 'wake up and listen' to warnings. Two committees say board
minutes reveal that a finance director was blowing the whistle on accounting
irregularities. Infosys and Tatas are said to have faltered on the Corporate
Governance front. Several major corporate houses are knocking the door of
insolvency. UQ
Solution1: Buyout process starts with a Balance Sheet and ends in it. Balance
Sheet is the result of Quantitative elements of management based on financial
transactions.
CREAM
Analytics is
based on
Inactivity Based
Cost
Management,
my IPR ,4
unique that
would remain
unchallenged
for millenniums
to come. Buyouts are a decision making process, involving future cashflows that
are purported to be a sure event with a meagre financial quantitative elements
of management being analysed. Know it in a company, it represents a mere
15%. 85% are qualitative elements of management that are NOT measured.
Measuring Cost Consequence is not an art but a Science, that you can write
down and express mathematically.
Avoid Buyouts based only on Balance Sheet Analysis.
An extract from the book follows [page 96/230]:
Q: What Audit profession profession fails to ferret out the facts and Corporate
fail to measure are the Material Events within an organisation. Materiality is
https://news.sky.com/story/carillion-failed-to-wake-up-and-listen-to-warnings-112690333
Inactivity Based Cost Management - Copyright © REGN. NO. L-27490/2006 DATED December 1, 2006 Govt.4
of India, Copyrights Office, by the Author, Jayaraman Rajah Iyer
IBCM © Research 2018 /2 6

3. related to only one aspect of management that is financial transactions.
Quantitative elements of management constitute hardly 15% of operations. The
rest is made up of Qualitative elements. When we discuss substance created,
being put through Action Plan the materiality aspects of management in the
auditors report we are confining the reporting system to only one responsibility -
Fiscal. UQ
2. Investopedia: After completing its research, valuation and analysis of a target
company, the purchaser and target begin discussing a buyout. The purchaser
then makes an offer of cash and debt to the board of directors (BOD) of the
target company.
2. CREAM Analytics:
HP-Autonomy was a Buyout. It was a 100% Buyout and 100% disaster. VW
lack of Management Quality and Risk Management. Toshiba lack of Accounting
Quality. Industrivärden of Corporate Governance. CREAM Analytics measures
these Qualitative Elements of Management.
The Buyer is at fault of not knowing what is it they are buying? It is a shame on
HP to write-off $8.8 billion. Ignorance is bliss. But for VW it is stupidity. In case
of HP or for that matter the Buyout managers that had included all the 4 big
firms have no knowledge of Corporate Governance. Measuring Corporate
Governance is a must. In case of VW it is primarily lack of Management Quality
for VW having allowed a cheat software through the front gate, duly authorised
and signed, by the Board, and the CEO. In case of HP CEO is fully responsible,
that is Corporate Governance.
Cost consequence of buying an Autonomy or pushing a cheat software ought to
be measured, irrespective of a Buyout or not?
3. Investopedia:
The board either recommends the shareholders sell the buyer their shares or
discourages the shareholders from doing so. Although company managers and
directors do not always welcome buyout offers, the shareholders ultimately
decide whether to sell the business. Therefore, buyouts may be friendly or
hostile. Either way, the buyer typically pays a premium for gaining controlling
interest in a company.
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4. 3. CREAM Analytics:
Nokia was a good company that Microsoft acquired the mobile phone business
and portfolio of patents for 10 years. My gut feeling was Finland as a whole was
not favouring such a takeover. Today Nokia is back with their mobile business
but lost crucial space during the time iPhone ruled the market. But what made
the difference at the time of acquisition, IMHO Nokia’s Ethical Responsibility
would be different from Microsoft value system. We don’t have a CREAM
Analytics for either of them then and now. Just imagine the Buyout managers
have in their possession such qualitative elements of companies, the offer to the
BOD of target company would be entirely different. For example, Nokia would
have said no firmly and HP would have rejected the offer outright.
Watchout for the current Sprint and T-Mobile merger worth $26 billion? If
CREAM Analytics of these two companies are not measured now, take it the big
firms handling the M&A would have to be taken to task?
Extract from my book: [Aidan from CERN]
Q: As Aidan Randle-Conde says - Shiva literally casts a long shadow over our
work, a bit like the shadows on Plato’s cave. In Plato’s cave the prisoners who
are chained in a cave could see only the shadow in front a wall, not the action
of puppeteers from behind. They have no concept of reality as they never look
back but look only the shadows in the front wall. One of the prisoners get
freedom and runs outside to
acquire knowledge. He does
come back to the dark to explain
to the remaining prisoners of
reality. They think he is stupid.
They resist any attempt to free
them to see the reality. Corporate
is living in the Plato’s cave.
Corporate apathy is the same as of
those prisoners chasing a crooked shadow in Plato’s cave. They are stuck with
the past and are not ready to go out and see energy in its pure form. Those who
want to set themselves free from shackles of shadow boxing are welcome to
know what is crucial for them, to bring the abstractions into reality,
acknowledge value where value is due, and deconstruct what is valueless. How
to convert n-dimensional problems to n-problems of one dimension? What’s the
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5. relationship between CERN and Corporate? If CERN and their most advanced
Physicists could learn from Shiva how about Corporate? UQ
4. Investopedia: After completing the buyout process, the purchaser implements
its strategy for restructuring and improving the company. The purchaser may sell
divisions of the business, merge the business with another company for
increased profitability, or improve operations and take the business public or
private.
4. CREAM Analytics:
Organisation restructuring may be needed for both the entities not simply
rejecting the value system bought out unit. Nokia might have a good number of
value system but Microsoft didn’t see one that could have helped them to
compete better with Apple.
Prepare a CREAM Framework for both the companies after the buyout as below:
IBCM © Research 2018 /5 6

6. IBCM has 5-principles that are crucial for Corporate growth and development.
Please find in the article I posted in LinkedIn “Addressing the Big Lie of Strategic
Planninf - or Is it a Big Flaw?” in response to Roger Martin’s webinar in HBR:
https://www.linkedin.com/feed/update/urn:li:activity:6406527915709816832
Jayaraman Rajah Iyer
jayar@ibcm.in
IBCM © Research 2018 /6 6